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Florida Homeowners to Receive Refunds in $1.65 Million Settlement with Mortgage-servicing Company


CONTACT: Tami Torres, CFO's Office, (850) 413-2842
JoAnn Carrin, AG's Office, (850) 245-0177

TALLAHASSEE-State officials announced today that nearly 40,000 Florida homeowners will get refunds for fees improperly charged by Fairbanks Capital Corporation. The Utah-based mortgage-servicing company was ordered to pay $1.65 million in refunds under a settlement with the Economic Crimes Division of the Office of the Attorney General and the Office of Financial Regulation, part of the Florida Department of Financial Services.

The settlement follows an extensive review of Fairbanks' records by state examiners. The state alleges that the company was making improper charges, including fees for releasing borrowers from mortgages that were paid off and unwarranted payments for appraisals.

In the settlement, Fairbanks also agrees to improve customer-service procedures, stop charging unjustified late fees and establish proper procedures to prevent unwarranted lender-placed insurance.

Fairbanks will review its Florida loan files to determine eligible accounts and make appropriate reimbursement. The state agencies will oversee Fairbanks' payment of refunds, which will take place over the next six months.

"The purchase of a home may be a consumer's most important transaction," said Attorney General Charlie Crist. "We will protect Floridians from those who deceptively profit by threatening the security of homeowners who are just trying to keep a roof over their heads."

"The selling of mortgage loans has made it possible to turn more people into homeowners and that's good for the economy. But bad business practices destroy consumer confidence," said state Chief Financial Officer Tom Gallagher, who oversees the Florida Department of Financial Services. "Companies who seek to take advantage of unsuspecting homeowners will be tracked down and held accountable."

"Our goal is to protect the financial interests of Florida consumers," said Don Saxon, director of the Office of Financial Regulation. "And we will continue to aggressively investigate and demand compensation from companies who prey on unknowing consumers."

Fairbanks is based in Salt Lake City, Utah, with a regional processing center in Jacksonville. At the time the investigation was initiated, the company was servicing approximately 550,000 loans, including approximately 56,000 in Florida.

Consumers with questions should contact the Department of Financial Services' consumer helpline at 1-800-342-2762, or the Office of Attorney General's fraud hotline at 1-866-9NO-SCAM.

In November 2003, Fairbanks signed an agreement with the Federal Trade Commission (FTC) in which borrowers will receive refunds for other improper fees, including unjustified late fees and lender-placed insurance.

The FTC has also issued a consumer brochure, "Mortgage Servicing: Making Sure Your Payments Count," to help consumers understand their rights. The brochure explains mortgage servicers' responsibilities and urges consumers to keep records of their payments, insurance coverage and other information. The brochure can be found at: